Wednesday, July 3, 2013

Dividend Growth Portfolio, June 2013

Past couple of months have been volatile for many dividend growth areas of the stock market. First we got huge corrections, sell offs (whatever you want to call it) in REITs and utilities. That was followed up with a large slide in Canadian telecoms as news broke that Verizon had made an offer to buy Wind Mobile, 1 of 3 failing small Canadian telecom players, and was exploring the possibility of acquiring Mobilicty, another of the 3 failing small players.

A picture is worth a thousand words, so here's 3

The first depicts the massive slide in VNQ, the Vanguard REIT ETF, a 5% one day drubbing followed by a 20 slide before temporarily bottoming in late June.

Next one is XLU, the Utilities SPDR ETF, victim of a 13% sell off, quite a large move for a normally quiet sector.

 The last one is Rogers stock, which experienced a 15% slide, before the Verizon news came out, and delivered another 10% walloping in a single day

These 3 charts show you what can happen when there is too much froth in certain areas of the market. At the same time, they also show you that opportunities arise in the markets for those who are patient.

In June, I took advantage of the drubbing to add to my blue chip holdings in 2 sectors (utilities and telecoms) and initiate a position in a blue chip REIT. The purchases were funded with idle capital plus minor profit taking in Boeing.

New Purchases 
($ amount represents forward estimated yearly dividends of new shares)
Southern - $81.20
HCP - $126.00
Rogers - $74.82

Boeing - $29.10

Intrinsic Dividend Changes 
($ amount represents change in forward estimated yearly dividends based on dividend increase)
UnitedHealth Group - $27.81
Fidelity Spartan 500 Index Fund Adjustment - $0.55

May 2013 Annualized Dividend: $5017.54

+ $282.02 (from new purchases)
-  $29.10 (from sales)
+ $28.36 (from intrinsic changes)

June 2013 Annualized Dividend: $5298.82

End of 2013 Goal: $4700 to $5000
Whisper Goal: $5500

YTD Dividends Received: $2185

2013 Dividends Received Goal: $4200
Whisper Goal: $4600

Here is a graph of my dividend growth over the last 2.5 years (I didn't track values before 2011), tracked quarterly. I use an exponential trend line because compounding dividend growth follows an exponential model (a stock that raises its dividend 10% per year has a dividend that goes from x, to 1.1 * x, to 1.1 * 1.1 * x, and so on)

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